Leaders consider fund for future

August 6, 2013

MARTINSBURG - Eighteen legislators are heading to North Dakota later this month to learn about the state's Legacy Fund and bring back their ideas for West Virginia's potential longterm savings.

Among them will be Delegate Jason Barrett, D-Berkeley, who said he is interested in striking a balance between the state's immediate issues while looking toward its future.

The work group has been set up to study the potential of a future fund for West Virginia - a permanent endowment fund that will grow over the course of several years by way of natural gas severance tax contributions.

North Dakota implemented its Legacy Fund in 2011, and it has already grown to $1 billion with 30 percent of its oil and gas tax revenue contributing. Legislators there have designed it so they are not to touch the account until 2017 - and even then, it will take a two-thirds vote to spend it.

"What I want to talk to them about is what kind of return are they getting? Where are they investing the money?" Barrett said. "If we do this in West Virginia, how do we get the best return?"

It's not clear as of yet how West Virginia would use its future fund.

Barrett said his main concern, should legislation be passed creating the fund, would be setting it up properly.

"I'm not totally committed to one idea," Barrett said.

The junior delegate said he believes making the trip is integral for truly understanding the impact North Dakota's future fund has had.

"It's just that one conversation as opposed to having all 18 of us in a room, or more, and then having all those folks in a room," Barrett said. "There's something to be said for a face-to-face conversation."

Barrett said the trip is funded solely by the state of West Virginia.

There are no outside lobbyists contributing funds, and while he is unsure the cost of the trip, Barrett said the group's hotel rooms cost $77 per night.

According to a recent report by the Associated Press, Senate President Jeff Kessler estimated the total cost at about $1,000 per legislator.

"This is an important trip, and it could have a tremendous impact on the future of West Virginia," Barrett said. "We're not out there to be on vacation."

While past attempts to create such a fund in West Virginia have failed, Barrett said he believes the time is nearly right for it to be readdressed during the next legislative session.

"I think we're finally getting close to the point where it can be implemented," Barrett said. "Our job is to look at the information, bring it back, discuss it with our colleagues. Figure out how to implement it. Figure out a time frame. What percentage of the severance tax would be. There's still a lot of work to be done."

When thinking about the overall vision of West Virginia, Barrett said a healthy business climate is most important in keeping people from leaving the state - it's biggest problem. The future fund can aid in that, Barrett said.

"When the state has a huge rainy day fund like we have and a credit rating like we have, and then if we implement the future fund, we will show businesses across the country West Virginia is in sound financial position," Barrett said. "That tells businesses, there's no reason for the state to raise your business taxes."